The dearth of major sporting events was always going to weigh on Vitec's (VTC) first-half numbers. With the Sochi Olympics and 2014 World Cup out of the reckoning, constant-currency adjusted operating profit slid 7 per cent to £16m.
Management expect spending on product development - which rose to account for 4.6 per cent of product sales - and the £6m invested in higher technology businesses and trimming slower-growing activities to be worth it in the end. They also point to the success of newly-launched camera products. Demand for compact cameras is now recovering, with the top-line further benefiting from the group’s investment in marketing. That helped the group weather lower sales through third-party distributors in the photographic division, where revenues remained broadly flat at £63m.
The core broadcast segment fared better, thanks to robust demand for high-tech products such as wireless transmitters and receivers, small HD monitors and the recently launched mobile power and LED lighting products. Boosted in addition by currency movements, revenues here grew 11 per cent to £93m. Looking ahead, Vitec expects further growth from new product sales but warned that its markets are “stabilising” but still “uncertain”.
Concerned by the impact of currency, broker Investec slashed its adjusted EPS forecast for the year to December by 6 per cent to 53p. (from 55.8p in 2014).
| VITEC (VTC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 610p | MARKET VALUE: | £ 270m | |
| TOUCH: | 610-621p | 12-MONTH HIGH: | 670p | LOW: 539p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 271p* | NET DEBT: | 68% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 153 | 14.9 | 23.1 | 9.3 |
| 2015 | 156 | 12.0 | 18.9 | 9.5 |
| % change | +2 | -19 | -18 | +2 |
Ex-div:24 Sep Payment:23 Oct *Includes intangible assets of £89.5m, or 202p a share | ||||
